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Quest Means Business
U.S. and North Korea Could Take Steps Toward Formal Ties; California State to Sue Trump Over Emergency Declaration; Top U.S. General Visits Syria, Promises Withdrawal will Happen; Labor MPs Resign, Citing Brexit and Anti-Semitism Scandal; Saudi Arabia Sign Deals with Pakistan, Agree to Release Prisoners; Eight Arrested, Including Five Americans in Haiti; Lyft and Uber Race to Go Public; Lyft Founder and President Talks to CNN About IPO Plans; U.K. Airline Blames Brexit Turmoil for Closure; European Markets Finish Mixed. Aired 3-4p ET
Aired February 18, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST, QUEST MEANS BUSINESS: It is Presidents' Day in the United States. So no trading on Wall Street. No hour before the closing
bell, instead a moment to really look and see what's been happening elsewhere. Two up and two down in the European markets with some good
gains seen there. But the best gains of the day without the U.S. was in China where the shanghai composite was up some 2.5%. A strong rise on the
back of prospects for trade talks.
Look at the markets that were open, and this is what was moving them. Honda is reportedly pulling the plug on a British factory and it says it
has got nothing to do with Brexit. U.K. spies say they are ready to take the risk on Huawei's technology. And flights grounded and travelers
stranded, another European airline goes bankrupt. What is going wrong?
Live from the world's financial capital. What a spectacular view. There is the Statue of liberty over there on Presidents' Day, on Monday, it is
the 18th of February. I'm Richard Quest. I mean business.
Good evening. Once viewed as an engine of the British economy, it is now in deep trouble -- automobiles. Honda is reportedly preparing to close its
only U.K. factory and relocate the production back to Japan. It's a factory in Swindon and it employs about 3,500 people. The reports come
only weeks before Britain is set to leave the E.U. A local MP claims that Brexit was not or is not the driving force behind Honda's decision.
Despite those claims, a trend is becoming clear. Japanese car giants seem to be getting very much cold feet, serious worries over their British
plants. The red light, for example, Honda's factory has been in Swindon since 1989. Some 160,000 Honda Civics were made there last year. Now, it
looks set to be showing that plant the red light, closure with the loss of those jobs as production is consolidated back into Japan.
And in terms of other carmakers, Nissan is proceeding with caution. Now, Nissan's case, it's Sunderland. And that was the first in Britain that
really was the resurgence of car production in 1986. Just last month, Nissan scrapped plans to build its new X-TRAIL SUV there. And Honda -- I
am sorry, Toyota has been sending out its own warning signals about its Derbyshire plant. It says production will temporarily be halted in the
event of a no-Brexit deal.
Whichever way you look at it, all the carmakers seem to be suggesting, at best warnings, at worst slow and stop. Anna Stewart is with me from
London. The announcement of Honda coming on the back of worries from the other, the Japanese carmakers were the first to warn that they would move
out in the event of Brexit.
ANNA STEWART, REPORTER, CNN: They warned again and again and again, and this of course comes at a time when the U.K. is trying to negotiate an
agreement with Japan to try and replicate what they've managed to get between the E.U. and Japan, which is now a free trade agreement, and it is
one reason why Japanese factories are going to be able to export straight from Japan. They don't as much need a European base.
But the U.K. is falling back here, and Honda have not actually confirmed this yet, Richard, but the MP for the area essentially said that this news
came out before they were able to speak to their workers. Three and a half thousand of them who tonight will be very worried about the future.
QUEST: Toyota, if you'll remember, and the Japanese Ambassador in London were amongst the first to warn of the problems. The Japanese government
from Tokyo even put out a warning early on to the British government. And only last month, we heard that the Japanese Prime Minister with Theresa
May.
So Japan is leading the way, if you would like, in negotiating what comes next.
STEWART: Quite, and if you read the "Financial Times" today, Richard, you will see from uncited sort of sources in Japan that apparently they feel
that U.K. has been very high-handed in these talks. And that the U.K. is not giving them an easy ride here. The U.K. wants to have a deal. It
wants it now. It wants it several months ago.
[15:05:05]
STEWART: And frankly, it needs it because anything shipping today to Tokyo will only just make it in time for the Brexit deadline, but the
negotiations appear to have hit a bit of a stumbling block. And they are meant to be going on this week. I spoke to the Trade Department today,
they said, you know, there's nothing to report yet. We can't discuss it.
QUEST: Right, now, Anna, you've been watching Brexit as closely since the whole thing -- since the referendum. The U.K. has done numerous side
deals. It announced the latest one with Israel in the last few days. These deals only take place what? After the two-year transitional period
or I imagine in the event of no-deal Brexit almost immediately?
STEWART: Yes, crucially in the event of a no-deal Brexit, most of them will take place the very next day. Some of them are just mutual
agreements, we had an important one with the United States over the weekend. That replicates the situation at the moment for certain sectors.
Some will replicate actual trade agreements, for instance, Israel, Switzerland, Faroe Islands, but still, we're missing our big, big trading
partners like Japan, like Australia. We need more here is what I'm hearing from business leaders.
QUEST: Anna Stewart, keep watching. There are many developments in the days ahead. We'll need you to be fully on top of them. Thank you. China
is accusing the United States and its allies of bullying Huawei. That's in response to the U.S. Vice President, Mike Pence, who over the weekend said
the U.S. has been very clear with its security partners on the threat by the Chinese telecoms companies, such as Huawei.
Now, Mike Pence was talking collectively about what is known as the "Five Eyes." This is New Zealand -- well, the Five Eyes are the five countries
who share intelligence information and data seamlessly. It is the highest level of intelligence cooperation. And obviously, it is Canada, U.S., New
Zealand, Australia and the U.K.
New Zealand and Australia have already banned Huawei's equipment from their 5G networks. Canada is considering the same. The U.S. is leading the way.
And now the U.K. is saying it might a manageable risk. As for China, officials there say it's all a ploy.
(BEGIN VIDEO CLIP)
GENG SHUANG, SPOKESMAN, CHINESE FOREIGN MINISTRY (Through a translator): The U.S. and some of its allies have double standards on this to mislead
the public. The real purpose behind this is to make excuses to hammer the legitimate rights of Chinese companies.
(END VIDEO CLIP)
QUEST: Going back to the Five Eyes, as I was suggesting, the U.K. in its latest threat assessment from the National Cybersecurity Center on Huawei
says there are ways to limit the risks involved in using Huawei's equipment. Now, that may undermine the American campaign and you can start
to see it is going to get rather nasty.
Samuel Burke is in London. Exactly what is the U.K. saying about Huawei and which already has its equipment in BT's infrastructure.
SAMUEL BURKE, BUSINESS AND TECHNOLOGY CORRESPONDENT, CNN: Richard, what the U.K. is saying here is basically even if there are problems, we know
how to find them and we know how to patch them. And that is much more in line with what I've been hearing from cybersecurity experts for years.
They've said even if these problems exist, a country like the U.K., U.S., New Zealand, which ever one of these countries can go in and repair this
problem.
So, yes, it may upset the United States, but as you're talking about the Five Eyes there, do you really think that the U.S. is going to treat the
U.K. the way Mike Pompeo is suggesting, the Secretary of State of the United States in Hungary last week? These are countries with deep roots,
deep ties, and one can't imagine all of a sudden the Five Eyes stop sharing information with each other the way the U.S. was threatening to do in a way
with Hungary just last week.
QUEST: Well, you say that, you say that, but this might be the linchpin of any such deal. And what about our next guest, who we are going to hear
from, who says that whilst it is a Five Eyes problem, he says that the real issue is not so much listening and spying and all of that sort of stuff,
but if Huawei is suddenly instructed by the Chinese government not to fix a patch, not to repair, not to maintain.
BURKE: It was fascinating what Huawei responded to that today saying maybe the United States is just upset because they don't have an American leader
in 5G so that they can listen in on the world. It's classic China to flip the script like that. But that is the reality and why we've been reporting
on this program for years that if a government requests a back door, whether it's the United States and the San Bernardino terrorist attack or
the Chinese requesting it from a company like Huawei, a back door means an open door for so many groups, not just the country at hand.
QUEST: Right, but what about if Huawei just decides not to service it? If there's a problem or a fix or a patch and Huawei just says, "We're not
going to deal with it." You know, "Over to you now, U.K. government."
[15:10:09]
QUEST: "It's on your own head."
BURKE: That's a huge problem if Huawei doesn't fix it, but what the U.K. is saying here, Richard is that we can fix it. They can take the Huawei
equipment, which I have seen on top of the buildings in the city, for instance. They're saying right now in a very clear message, we understand
how the equipment works. We can go in and repair the equipment. We can change the equipment. And that is a very different tune from what the
United States has been saying for really years now.
QUEST: Samuel, thank you for the overview on that. One of the important points is that the U.K. has actually had this committee running for some
four years. It's a major committee that looks at Huawei working with the company investigating all its technology.
Nigel Inkster served as Director of Intelligence and Operations at the U.K.'s MI6. Now, a senior adviser for the International Institute for
Strategic Studies. He is the author of a book on China's cyber power. On the line from London earlier, he said there's another risk to consider when
you look at the whole spying question.
(BEGIN VIDEO CLIP)
NIGEL INSKTER, FORMER DIRECTOR OF INTELLIGENCE AND OPERATIONS, MI6: The first thing we have to say is the report that's come out from the NCSC is a
technical report. It doesn't represent the final U.K. position on this. It is simply looking at this from the technical aspect.
And I think what the NCSC says is probably true for all normal operating situations. In other words, in relation to normal and everything is going
fine. But I can't help wondering whether it's given sufficient thought to the prospect of a serious downturn in relations, difficulties with China to
the point where the Chinese state tells Huawei, "Okay, now you need to stop sending all the code patches that will be necessary to keep this situation
working. Basically, we want you to take the British offline."
And I'm not sure to what extent that's been looked at. This is not about - -
QUEST: The fear here is not so much of them eavesdropping or data being sent back to Beijing, you're saying the fear here is essentially that --
the old one of, "Well, we're no longer going to support it. You're on your own, mate."
INKSTER: Well, that is it, indeed, and done for political reasons. I mean, I think it's fairly clear that China has been stealing a lot of
British secrets using cyberattacks, which have not been dependent upon Huawei core technology, and I expect they will continue doing that any way.
QUEST: If the U.K. does go ahead because it believes there's a manageable risk and uses Huawei equipment and technology whilst the U.S. continues to
exhort its allies not to touch anything with Huawei in it, does this put the Five Eyes security pact at risk?
INKSTER: Yes, it does, which is why I suspect that this report, which as I said before is a technical report, is really only part of the process. And
it seems to me in an ideal world, it would have been better to keep it back until the government as a whole, through the National Security Council and
the Cabinet who have had an opportunity to look at all the factors, in particular this very important strategic factor, because for the United
Kingdom, the relationship -- the Five Eyes relationship has for the last seven years been a very important component of the U.K. National Security,
and I don't think that they can easily afford to play fast and loose with that.
My feeling is that when the crunch comes, they're probably going to have to make the decision to follow the U.S. lead.
QUEST: Right.
INKSTER: But obviously, that's not a decision that's yet been taken.
(END VIDEO TAPE)
QUEST: As we continue, the world's second richest man, Bill Gates, says he doesn't fear a debate about socialism in the United States, Capitalism can
wait. Digital gangsters -- U.K. lawmakers are giving Facebook a big thumbs down. We'll explain.
(COMMERCIAL BREAK)
QUEST: U.K. lawmakers are sending a message to Facebook that it is not your friend. They liken the social media giant in their words, digital
gangsters and consider themselves beyond the law. A Parliamentary committee found the company intentionally and knowingly violated data
privacy and competition.
It also accused the CEO, Mark Zuckerberg of contempt for refusing to come and answer its questions. The Committee's Chair spoke to CNN and
elaborated on the gangster analogy.
(BEGIN VIDEO CLIP)
DAMIAN COLLINS, CHAIR, U.K. DIGITAL, CULTURE, MEDIA AND SPORT SELECT COMMITTEE: We've referred to Facebook as sort of digital gangsters because
we believe that it's not a question just of mistakes being made on the platform, but they're fully aware of these as a company, aware of issues
around the way in which they gather user data and share that with other developers. I think, often without the users really understanding that's
what's going on.
The aggressive position they take against other developers that work with the platform, including making decisions that can lead to those businesses
closing, and I think their persistent failure to deal effectively with harmful content. They have got the technical know-how to sell us products
based or to help advertisers to sell their products based on a deep understanding of everything we do on Facebook, so why can't they do more to
use the same technology to address harmful and illegal content that shouldn't be there.
(END VIDEO CLIP)
QUEST: Donnie O'Sullivan is with me. The one thing about the select committee, they would have looked at this in great detail. This is not the
U.S. Senators reading prepared questions and getting and showing incompetence. The Select Committee will be highly informed on this, so how
should we address their criticisms?
DONIE O'SULLIVAN, REPORTER, CNN: This was a hugely detailed investigation. It went for more than 18 months. Hundreds of interviews and they spoke to
experts all around the world. They even took a trip to Washington, D.C. in an attempt to try and get Mark Zuckerberg to appear. He repeatedly refused
to come in front of the committee.
QUEST: Why, do you think? Why?
O'SULIVAN: I mean, Facebook's argument would say, "Well, we can't send our CEO to every Parliament in the world." And I think the U.K. lawmakers
said, "Well, you know, we have 60 million people here. We are one of your biggest markets and we have been investing a lot of time into this
investigation." So Damian Collins, the MP who leads the committee that you saw there, he actually said that Zuckerberg showed contempt towards
Parliament.
QUEST: I can see arguments on both sides on that, but as to this fundamental accusation, allegation that they are digital gangsters that
they are knowingly behaving in a way that they know is against the law or against practice.
O'SULIVAN: So, the Committee's main findings are based on a trove of internal Facebook e-mails that the Committee was able to get their hands on
through a very long story, but through a court case that was brought in California against Facebook.
[15:20:10]
O'SULIVAN: And in those e-mails, including Zuckerberg, Collins, the head MP characterized those e-mails as showing the company saying, "Wow, if
people knew -- if our users knew how much data we were actually taking from them, they might be concerned," and also and designing tools which made it
deliberately misleading or difficult to make yourself fully private on Facebook.
So what Collins is saying and what the Committee are saying is the era of self-regulation in tech should be over. Now, I mean, these are only the
Committee's recommendations. The U.K. government has I think about eight weeks to respond. And they're not obligated to act, but this is a scathing
report, and I think one that will be taken notice.
We know that the Culture Secretary, Jeremy Wright is meeting Zuckerberg in Silicon Valley this week. So it's likely that this report will come up in
conversation.
QUEST: I mean, Facebook gets it from all sides. From your reading of this, how much justification is there for this?
O'SULLIVAN: Well, I mean, it's not just an issue with Facebook. It's an issue with all of tech. You know, we don't talk about Google a lot.
Twitter is a much smaller player, but they also have a huge part to play in this. So you're right, this whole report was about Facebook essentially.
And our colleague, Hadas Gold asked them today, they said, why have you focused so much on Facebook if this was supposed to be about
disinformation? And they said, "Well, they're the biggest player in the game."
QUEST: I was just about to say, they're the biggest player. Good to see you, sir. Thank you.
O'SULLIVAN: Thank you.
QUEST: Bill Gates says it's good to debate whether big tech companies pay their fair share in society. The founder of Microsoft spoke about the
recent anti-billionaire backlash, he was talking to CNN's Fareed Zakaria who asked him if leaders like Howard Schultz, former CEO of Starbucks can
be taken seriously as a political candidate.
(BEGIN VIDEO TAPE)
BILL GATES, CO-CHAIR, BILL AND MELINDA GATES FOUNDATION: The success you have in your life before you run for office, absolutely gives us a sense of
your leadership skills, your understanding of very complex problems. You know, the voters decide in general who helped win the war, World War II, is
that a good qualification or not?
Howard Schultz did a great job with his business, so there's some things that he gets some deep understandings from. Likewise, somebody who has
been a mayor or a governor, they have been in an executive role as well.
So I do think it is fine. You probably will find rich people disproportionately in your political representation, but you wouldn't
expect it to be more than like 5% of the representatives as a whole.
FAREED ZAKARIA, ANCHOR, CNN: Do you understand, though, the kind of -- all this backlash against capitalism and capitalists? So you have this with
Amazon in New York, where there was a backlash of saying why should New York provide $3 billion of tax subsidies to one of the richest companies in
the world? I mean, you, Microsoft has had to deal with these issues in Seattle, I imagine. Do you feel like we're in a new mood? Do you either
worry or how do you feel when you see this kind of thing happening?
GATES: Well, it's not the 1930s, where the system has really failed to provide adequate services, and therefore a lot of people are flirting with
dramatic changes, what used to be called socialism in the narrow sense. These are good debates.
Should companies be able to compete states against each other to get these subsidies? I sort of think not. But, hey, that is a separate issue. That
is not an attack on capitalism. Capitalism has hundreds of parameters that you can change like the estate tax, the capital gains tax, and it is still
capitalism. As long as you have market-based pricing, and you let people create new companies very easily, and you know, if you think there is a
lack of competition in some places, and you come in and intervene on that.
Part of the reason I think people should say, "Okay, some things are going well overall," is that flirting with radical change, and dramatic change,
and how we run these systems, and I personally, my vote would be not to make a radical change.
Now, you could say I am biased, because this system has worked very well for me, and I plead guilty to that, but as I look overall at the capitalist
economies, there's a lot of good things and I think you can tune the tax parameters and get way more equity and get some additional government
services and still be in the same basic framework.
(END VIDEO TAPE)
QUEST: We'll talk about this because Amazon seems to have been one of the beneficiaries of the legal, but unpopular tax parameters that Bill Gates is
speaking about.
[15:25:08]
QUEST: The retail giant hasn't paid any taxes to the U.S. government in the past two years, despite earning a record $10 billion last year.
And New York's Mayor Bill de Blasio is blasting Amazon for pulling the plans to build a second headquarters in the city. He called it an abusive
corporate power.
(BEGIN VIDEO CLIP)
BILL DE BLASIO, MAYOR OF NEW YORK CITY: They said they wanted a partnership, but the minute there were criticisms, they walked away. What
does that say to working people? That a company would leave them high and dry simply because some people raised criticism?
(END VIDEO CLIP)
QUEST: Greg LeRoy is the Executive Director of the campaign group, Good Jobs First who joins us from Washington. It is useful to begin a
discussion like this just to understand the parameters. You are not against corporate subsidies or tax benefits to corporations in the right
circumstances, is that right?
GREG LEROY, EXECUTIVE DIRECTOR, GOOD JOBS FIRST: Yes, Richard, that's right and thanks for having me. Look, there is a place for incentives. If
you're going to bring a grocery store to a food desert, the private market is not doing that. If a citizen returning from incarceration needs new
skills to get a better second chance in life, that's a completely appropriate use of government funding.
But too many of these programs have become sort of automatic "gimmes." Developers and big companies like Amazon expect them. That's the problem.
QUEST: Right, so you have got Foxconn, I think it was in Wisconsin. You have got Amazon. Were you surprised that Amazon folded its tent quite so
quickly?
LEROY: I was because I thought that Amazon had a strong business case for being in New York. I thought there was a strong business logic for their
choice, but I also wasn't surprised because we know this company is thin- skinned.
We know from the way they handled the issue of the very small head tax in Seattle to help create homeless shelters and some more affordable housing,
the very heavy handed way they helped defeat that law that they don't want people questioning their behavior, and that's why they backed off from the
table even though the Mayor and Governor were trying to broker things for them in New York.
QUEST: The debate over New York, I mean, relative to the amount of tax revenue or economic benefit that Amazon would have brought to Long Island,
we can argue about whether or not it needs it, we can argue about, is it a thriving place to start, but there would have been an economic benefit.
That benefit is relatively small -- sorry -- the mount of subsidy is relatively small to the overarching economic benefit.
LEROY: I actually don't know that that's true. The cost of a $122,000.00 per job that we knew about. There was one incentive that was not yet
disclosed. That means that the average worker at Amazon would have to generate $122,000.00 more in state and local taxes over time than public
services they and their families would consume. That's a big number to overcome.
I think it's in the gray area. I would like to see the math on that and because we also know that Amazon is so good at tax dodging, as you pointed
out, they have not paid Federal income tax for two years. They get about 20 different incentive packages around the country for their warehouses and
datacenters and white collar employment centers. This is a very aggressive company that are not paying taxes.
QUEST: You can't blame them. I mean, at the end of the day though, tax avoidance is good for shareholders, good for stakeholders. Arguably, good
for wage increases when you look at Amazon, of course, as it did raise the minimum wage that it pays.
LEROY: When they announced the $15.00 an hour for its warehouse workers, in part because of pressure from people like Senator Bernie Sanders, it was
actually a pay cut for some people because they eliminated some bonuses and some stock options. And I think the reality was, in some labor markets
they were paying above that to begin with.
So this is a company again that was very sensitive to market realities, but it has resisted unionization.
QUEST: Right. Would you say you can sum up the Amazon issue with good riddance?
LEROY: Well, you know, I was so heartened to see Bill Gates oppose the war among the states. This is a problem that we've had for many decades and
look, Amazon already has thousands of employees in New York City, and they will continue to grow there as do Google and Facebook and many other dozens
of tech companies because it's a great labor market for tech companies. They just won't be getting billions of dollars from taxpayers that they
don't need.
QUEST: Greg, good to see you, sir. Thank you.
LEROY: Likewise.
QUEST: We'll talk more about this in the future. Thank you. As we continue, after days of violent protests, eight people have been arrested
in Haiti, five of them are American. We're live in Port-au-Prince in a moment.
(COMMERCIAL BREAK)
[15:30:00] RICHARD QUEST, HOST, QUEST MEANS BUSINESS: Hello, I'm Richard Quest, there's more QUEST MEANS BUSINESS in just a moment. When Uber is
racing against its rivals to get to Wall Street. You're going to hear from the president of the major competitor, principal competitor in the U.S.
Lyft.
And one of the most famous names in aviation is celebrating its 100th birthday with a makeover. And you makeover in the future by going back to
the past. Before that, this is CNN, and on this network, the facts always come first.
The U.S. and North Korea could be about to take a step towards formal diplomatic ties. We're hearing sources in Washington and Pyongyang are
considering exchanging liaison officers. The U.S. State Department didn't have a comment, but it comes ahead of a summit between President Trump and
Kim Jong-un later in the month.
California says it's joining forces with about a dozen U.S. states to sue President Trump over his declaration of a national emergency. California
officials accuse him of violating the constitution, and in their words, stealing money from his -- for his border wall from funds allocated by
Congress for other purposes.
The top U.S. general leading the fight against ISIS spent several hours in northern Syria on Monday. The General Joseph Votel rebuffed local allies
request for American troops to stay on the ground. Two U.S. military officials said at the beginning of the troop withdrawal from Syria is
imminent.
In the U.K., seven MPs from the opposition Labor Party have abruptly resigned from the party, saying they're embarrassed and ashamed of their
party's handling of Brexit. The defectors represented growing call for a second referendum, they also expressed their lack of confidence in the
handling of the Labor Party's scandal over anti-Semitism.
Saudi Arabia's Crown Prince Muhammad Bin Salman is headed to India. He spent two days in Pakistan where he signed investment deals worth $20
billion, kicking off a tour of Asia. Pakistan's foreign minister also said Saudi Arabia has agreed to release more than 2,000 Pakistani prisoners.
[15:35:00] In Haiti, authorities have arrested eight people, and that includes five Americans on charges of possessing illegal weapons. This
video shows them in Port-au-Prince police station. The arrest follows days of protests over corruption, specifically over what happened to money made
from subsidized Venezuelan oil.
Miguel Marquez joins me live from Port-au-Prince. How did this all get so bad so quickly?
MIGUEL MARQUEZ, CNN CORRESPONDENT: Well, I mean, it depends on what you're talking about. With regard to the arrests, it is -- we just spoke to the
police chief for the national police who says they were picked up because they were in suspicious cars.
They had taken the license plates off of their cars, they were picked up, they had tons of weapons in the car including automatic weapons. They had
satellite phones, they had drones and lots of other handguns as well. All of that was very suspicious.
They had first said they didn't cooperate, then they said they worked for the central bank, that didn't check out, they said they worked for others,
nothing has checked out so far, they're being held on an illegal possession of weapons charge right now.
But an investigation is under way into who these guys are and what exactly they are doing here. I can tell you that it is certainly throwing the
entire country into a bit of a flip because no one can seem to answer who they are, what they were doing here and what their aim was.
QUEST: So what's the fear?
MARQUEZ: Well, the fear is -- so this all happens against the backdrop of these protests that have been going on for nine days. Very serious
protests that rocked this country to its core. Many in the government say that there are opposition leaders, there are -- there are foreign
influences that are starting to fund the efforts to destabilize the government here.
That is the big concern, that's what a lot of people are jumping to, that's what people sort of think might be going on here, but it is not clear. Do
they work for the president? Do they work for the Prime Minister? Is there something else going on?
There are lots and lots of rumors floating throughout Haiti right now. But right now, they know they're under arrest and an investigation is under
way.
QUEST: So last week when Haiti's president put out that statement, and made that address to the people, basically saying, let's all come together
in the interest of Haiti. Do I gather from what you're saying that nobody is listening?
MARQUEZ: They are listening, but they also want him particularly to resign. He came out and said let's all get together and blamed a lot of
the concerns that they're experiencing right now on gangs and bad actors in society. Are these individuals the sort of individuals he was referring to
or is there something else?
The Prime Minister now says that there's a plan to cut government spending, to end the perks of government workers and to increase the minimum wage
here. Are people -- people are perhaps somewhat hopeful that, that may produce --
QUEST: Right --
MARQUEZ: Something, but they want to see results. People across the spectrum here, middle class to very poor Haitians are tired of it. They
say, they want to see results. Richard.
QUEST: Miguel, back to those arrested with their cache of guns and armaments, is there a worry that foreign national -- foreign governments,
the U.S, anybody else is starting to interfere in what would be called the internal affairs of Haiti? And if there are, which governments might it
be?
MARQUEZ: Well, that is certainly grist for the rumor mill out there, and that's what people are talking about.
However, what the president and what those in power, what officials are saying is that there are groups out there, perhaps not government groups,
but either powerful business interests, drug interests, other illegal or criminal interests out there that are funding these activities on the
streets, getting people out there that these are not just an expression of democratic desire, that this is being engineered by somebody other than the
people on the street and the Haitian people.
That is the concern --
QUEST: Right --
MARQUEZ: And that's what has the arrest of these individuals just so tantalizing to so many Haitians right now.
QUEST: Miguel Marquez, thank you, we'll talk to you about more of this during the week as we progress, thank you.
MARQUEZ: You got it.
QUEST: If you believe Uber's new CEO, the company has turned a corner when it comes to culture. Lyft's president has harsh words for his rival. Both
Uber and Lyft racing to the IPO after the break.
[15:40:00] (COMMERCIAL BREAK)
QUEST: Well, welcome back. The president of Lyft tells CNN it's important for his company to go public. You'll hear from John Zimmer in just a
moment. We need to understand why though Lyft competes with Uber on the street, and now it's competing in the race to Wall Street.
Both companies Lyft and Uber have filed confidential plans. Now, who will file first? Who will get there first? Well, the arrival time for Uber looks
like it's going to be sometime around about mid of year. And the arrival time for Lyft roughly the same.
The buzz is both want to be first, but obviously you can only have one first. And then, of course, if you're first, well, the other one risks
being compared, and you don't want to be compared to the second one. Actually, the two are not comparable at all in terms of it.
Uber is a platform, you can ride, you can hail, you have Uber eats, and most crucially, Uber has global reach. Lyft on the other hand is focused
just on North America. So if your IPO at the same time, you're really comparing apples and oranges between the two.
As for what happens, well, Lyft is banking on a better corporate image. Uber's last driver drove off sometime before investors really got angry and
fired him. That covers the what? When and how of this particular launch. Poppy Harlow asked Lyft's president exactly why it's important to take the
company public.
(BEGIN VIDEO CLIP)
JOHN ZIMMER, FOUNDER & PRESIDENT, LYFT: It's important for our drivers and passengers and, you know, main street USA to have access to wealth
creation. And I think that's important. It's important -- and they're important for our team members, our employees to have liquidity and get
value from the hard work they're putting in.
It's important to create a currency and get the right to valuation for the work that's happening. And I think going public brings a certain amount of
proper accountability to businesses.
POPPY HARLOW, CNN: The word on the street is that going to happen this Spring or Summer. Can you give me an update on the timeline?
ZIMMER: I cannot.
HARLOW: Reporting has been that Lyft's valuation is around $15 billion. Is that accurate?
ZIMMER: I can't comment on that.
HARLOW: How intent are you on Lyft having a public offering before Uber?
[15:45:00] ZIMMER: Also something I can't comment on. In -- at a high- level -- how the company finances itself, again is less important than the mission and the execution.
HARLOW: Are you concerned about a conflicting IPO with Uber? Meaning, do you have any concern if Uber were to beat you to the public market and beat
you on an offering day?
ZIMMER: Of all the things that we faced over the last six years, this is not something I'm concerned about.
HARLOW: Is Uber a more formidable competitor, John, now with Dara leading than with Travis Kalanick and the controversy that surrounded him?
ZIMMER: No.
HARLOW: It's not?
ZIMMER: No.
HARLOW: Do you think Dara has changed the culture?
ZIMMER: I don't know, I don't -- I don't -- obviously don't work there.
HARLOW: Is there anything you admire about Uber?
ZIMMER: I think I'm going to say no.
HARLOW: Nothing.
ZIMMER: That's a really -- there's a lot of levels to that experience over the last few years, so it would be hard for me to say anything, but that.
(END VIDEO CLIP)
QUEST: Brutal. When we return, a U.K. airline is grounded for good. The plane's Brexit's turbulence for its untimely end. In a moment.
(COMMERCIAL BREAK)
QUEST: So, we started this morning talking about Honda and jobs from the swindle-in factory. Well, on the road or in the skies, Britain is
beginning to feel the deepening effects of Brexit. Honda seems to announce a closing of an English factory.
And now the British airline BMI or FlyBMI claims it's being grounded by the U.K.'s uncertain economic future. Four hundred staff and thousands of
travelers are stranded, it's tough of course without a job. FlyBMI's story at the moment is not far from unique.
Faced with rising fuel costs, environmental taxes and fierce competition, more low-cost carriers have been driven out of business. So Monarch went,
that was a British, been around for years, Primera Air, European, Fly VLM, gone, Global gone, Germania, that was a shocked one, that went, FlyBMI
gone.
You get the idea. Get out your phones, go to cnn.com-slash-join. Tonight, we're asking you, in this environment, when you're flying, what's the most
important thing choosing the airline to fly on?
[15:50:00] Is it the price? Is it the service? Is it the loyalty program or is it the schedule? When you are paying -- and well, let's make it your
own money. When you're paying out your own money, which is more important? The price, the service, the loyalty program or the schedule? Go to cnn.com-
slash-join and you will see the results on your screen.
Simon Calder is a senior travel editor at "The Independent", he joins me live from London. Simon, FlyBMI is blaming partly on Europe or Brexit
because it said, it couldn't give contractual certainty for European contracts. Are you going -- are buying that?
SIMON CALDER, SENIOR TRAVEL EDITOR, THE INDEPENDENT: Yes, while every single corporation on this side of the Atlantic which has problems blames
Brexit for it, actually FlyBMI has pretty good grounds for doing so. All the way from the collapse of the pound sterling against the U.S. dollar
immediately after the referendum to leave the European Union through to the fact that here we are about 38 days out from when the U.K. leaves the EU,
and no U.K. airline knows what its rights will be to fly in Europe.
And if 40 percent of your flying as was the case with FlyBMI is within Europe, as it were domestically within the 27 remaining states of the
European Union, and you don't know if you're going to be able to do that this Summer, and you can't sign any other contracts with big corporations
in order to get some work from them.
Then you're rather stuck. Add to that, of course, the softness of the U.K. economy because of all the uncertainty around, and it's a dreadful time to
be a regional airline of this scale that FlyBMI a bit was, which was tiny. Ryanair; the biggest European budget giant flies as many people in a day --
QUEST: Right --
CALDER: And a half as FlyBMI did for the whole of last year.
QUEST: OK, but FlyBMI, separate company, separate airline, but similar problems. Fly B, of course, which is just --
CALDER: Yes --
QUEST: Sold itself off, tried again regional flights in Britain. I'm wondering, do these regional carriers ever stand much chance of success?
CALDER: Well, it all depends where they are, Richard, so in the United States, you've got a whole range of feeder airlines working for these big
network carriers, and they have been going for years and they're doing a pretty good job, I think, people would say both in terms of you know,
actually making some money and delivering decent service.
The big problem here in Europe is that the low-cost giants, Ryanair and EasyJet are so dominant that they will just sit there and watch while an
airline like Fly B builds up a route, and when it reaches a certain market size, they will just --
QUEST: Right --
CALDER: March in because they've got bigger aircraft and economies of scale, more efficient --
QUEST: Simon --
CALDER: Operations, they'll just take out all the passengers.
QUEST: Simon, stay with me, don't go away because while some carriers are grounded after a few years in business, one British aviation institution
has made it to a whole century. British Airways is celebrating a 100 years since its maiden flight with a plane repainted in the old B-O-A-C design
7400.
And all go fly from London to Paris with a single passenger, and the flight which I think is flatly worth coming across to New York tomorrow. Simon, a
100 years of BA. The -- what do you make of the strength and weakness?
CALDER: Well, British Airways has actually turned itself around. It was like so many big European airlines, effectively a branch of government up
until the mid '80s when it was about the first big carrier to be privatized.
Now in private hands, part of the IAG consortium, along with Iberia of Spain, Aer Lingus of Ireland and so on. And it of course got the strangle-
held the most routes at the world's most in-demand airport which is London Heathrow where that 747 landed this morning at about 10:20 local time.
So they got lots of advantages, they do play to their strengths, but of course, they are in the most competitive aviation market --
QUEST: Right --
CALDER: In Europe, possibly the world.
QUEST: Simon, what was the -- I think it was either Imperial Airways or Empire Airways or something like it when it originally started. And Simon,
finally for you, the man who pays his own way, what's the most important to you when choosing an airline? Price, schedule, loyalty or service?
[15:55:00] CALDER: The -- so fares that I pay you certainly, you're not going to get any loyalty bonuses these days, I'm afraid, price is the top,
but schedule, and then service, I guess is in third place, thank goodness, Richard, we can pretty much in all the flights that you and I and your
lovely viewers are likely to take be absolutely assured of safety.
QUEST: All right, which is why it doesn't appear in the list. Good to see you, Simon, thank you very much, indeed. Simon joining me. Now, according
to those votes, let's have a look. Price is the most important factor when you are picking your own airline.
As to what investors on Wall Street will be looking at, well, investors of course today was a day off in the U.S., Presidents' Day, but trading did
continue over in London. So we will finish this part with a look at that. Two down and two up. The shares though remaining at a near four-month
high, not surprisingly auto shares slumped over concern over the new U.S. tariffs.
French stocks, CAC Quarante extended its rally and they rose almost 4 percent last week and good gains as it continued over there. New York will
open up tomorrow morning, 9:30 as usual. We will have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment, somewhat unfortunate on the day that FlyBMI goes bust, British Airways announces their repainted B-O-A-C 747 as
part of a lovely re-celebration of a 100 years of flying. It takes a certain amount of skill, it certainly takes a lot of systemic advantages, a
strong hold on your hub, strong routes, proper labor relations, and eventually you can stay in business for some time.
BA for example, B-O-A-C was before it, before that in 1939, it was Imperial Airways. Now, of course, it's much more difficult to have the alliances
with IAG, but fundamentally as our survey tonight shows, people look for the price. People want the cheapest price for the best flight for the
furthest that they can travel.
Which is a problem for those smaller airlines like FlyBMI, Fly B, and all the others. Even Norwegian that simply can't compete. It takes real skill
to have been around for a 100 years and celebrate B-O-A-C and all that came before.
And that is QUEST MEANS BUSINESS for tonight, I am Richard Quest in New York.
END
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